Helping the Insurance Industry Serve Customers

In an iconic Twilight Zone episode, aliens arrive on planet earth. They bring with them a book entitled To Serve Man, from which we earthlings infer that the alien mission is "to perform a service for humanity." At the end of the story, the alien book is revealed to be a cookbook, whose main ingredient was humans.

Here is my story about ways to better serve customers in the insurance industry. And to be clear, I mean it in the naive earthling sense -- practices that improve how insurers perform a service for their customers.

Use Change Management to Digitize Customer Processes

Customer service is a top priority these days for insurers, and efficiency is the biggest challenge for executives who manage customer-facing operations according to 88 percent of those recently surveyed by CEB TowerGroup. Further, according to TowerGroup insurance analyst Sam Stuckal,

The concept of back-office efficiency driving front-end service excellence has never been more in focus than it is today. Key issues remain unresolved, including heavy dependence on paper and low levels of digitization. In fact, one top-tier US life insurer estimates that only 5 percent of their operations are digitized.”

In turn, powerful benefits are realized when a change to digital is enabled. Companies are spending countless cycles, applying valuable resources and making significant investments, all focused on ways to better serve their customers. Change is clearly needed, but how to accomplish that change is the question.

As a recovering Six Sigma “Green Belt,” I know that process improvement methodologies and software are a big part of how change can be realized. But as in so many endeavors, success lies not only in first achieving the technical improvements, but also in ensuring the changes can endure. If you don’t pay attention from the start to making change stick, then the advantages you’ve gained from process improvement initiatives like Lean, Six Sigma and BPM (business process management) will eventually disappear.

Perhaps a cookbook approach that helps make and sustain change is in order to better serve customers? CAP -- Change Acceleration Process -- is a discipline I used extensively at General Electric to drive operational efficiency and productivity improvements in the business. I recommend checking it out and using it in conjunction with your chosen process improvement methodology.

User process acceptance is one of the fundamental principles underlying CAP. CAP is focused on overcoming resistance to change and increasing the success of change efforts by emphasizing not just the quality of the technical solution, but also the role that stakeholders play in process change. CAP centers on the need to consider how people will embrace, accept and adopt change resulting from your process improvement efforts.

One of my favorite success stories that illustrates this principle is Irish Life, one of Ireland’s largest and most successful financial organizations. Irish Life faced excessive turnaround times managing over half a million policies. There was no visibility of where work was in the process and the number one customer complaint was response time. Irish Life’s BPM solution removed paper from its processes and integrated the policy and supporting documents into the process flow, resulting in improved customer turnaround time and consistency, management visibility into all work statuses and a 35 percent improvement in productivity.

Further, realizing that the key to sustained success is engaging stakeholders, Irish Life included their process participants and stakeholders in the improvement initiative. By focusing on both the internal and external “customer,” Irish Life changed “how the work gets done.” In effect, they improved the worker experience, rather than merely adding speed to old and potentially ineffective ways of working or worse yet, changing the work without regard to the user view. From a people perspective, the system has made a huge impact. Employees have recognized and embraced the improvements being driven by the solution, and to date no backslide is evident.

Create Compliant, Yet Flexible Customer-Centric Processes

Insurers are under increasing scrutiny from consumers and the social media. In turn that is driving them to manage their risk and cost by improving their customer-facing processes. Success requires a customer-centric not channel-centric approach, and a process that is both compliant and flexible for efficient exception handling.

A recent Consumer Reports customer service survey evaluated home insurers based on criteria such as agent courtesy and timely payment. Claims pricing was the top priority among respondents; the importance of a problem-free claims experience was second. Amica, who ranked first in the survey, is a long time proponent of personalized face-to-face interaction, but now recognizes that many consumers now prefer digital communications. In order to stay ahead, it has adjusted its strategy to provide easily accessible information to consumers, including web and mobile as high areas of focus.

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